Jul-Aug ADP implementation hits lowest as projects stall due to regime change, interim govt’s limited mandate
Despite expectations of a rebound after last year’s political turmoil, development project implementation remains stagnant, officials say
Highlights:
- ADP spending even lower than last year's turmoil-hit period
- Contractors withdrew after regime change; most yet to return, stalling projects
- Election-related instability, interim govt's limited mandate blamed for sluggish pace
- Ministries like health, railways, commerce, education record below-average implementation
- Science and technology ministry leads with 10.75% implementation; local govt division follows with 3.45%
- Roads and highways, bridges, and power divisions lag far behind, with spending rates below 3%
The government managed to spend just Tk5,714.83 crore, or 2.39% of its Annual Development Programme (ADP), in the first two months of the current financial year (FY2025-26).
This is the lowest implementation rate on record, according to the Implementation Monitoring and Evaluation Division (IMED) data released today (15 September).
IMED officials noted that despite expectations of a rebound after last year's political turmoil, development project implementation remains stagnant.
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In the same period of the previous fiscal year, when the July Uprising brought activities to a halt, Tk7,143.08 crore or 2.57% of that year's ADP was spent, which is higher than this year's figure.
The size of the ADP stands at Tk2,38,695.64 crore, including allocations from the organisation's own funds.
After the fall of the previous government, many contractors withdrew from projects, and most have not returned due to political reasons. As a result, implementation has stalled despite instructions to ministries and divisions to begin spending early in the fiscal year, IMED officials said.
Stakeholders noted that last year's ADP recorded the lowest implementation rate on record too and a similar trend has been observed at the beginning of the current year. They warned that the pace may slow further in early 2025 as the national election, scheduled for February, draws nearer.
Economist Dr Mustafa Kamal, executive director of the Institute for Inclusive Finance and Development (InM), warned that ADP implementation could be even slower this year due to heightened political uncertainty ahead of the election and the limited mandate of the interim government.
"Past experience shows that implementation rates are usually low at the beginning of the fiscal year. But this time, election-related instability and the restricted functions of the interim government will slow it even further," he told The Business Standard.
"Development activities lose momentum before and during an election. After the polls, a new government will also need time to design its own plans. As a result, there is little realistic chance of a significant rise in ADP implementation this year," he added.
Stakeholders further said the government is now scrutinising projects before releasing funds. While this ensures more cautious spending, they noted that administrative complexities may also have an impact.
According to the IMED report, in July-August, Tk2,747 crore was spent from government funds, Tk2,501 crore from foreign loans and grants, and Tk467 crore from implementing agencies' own resources.
The report shows that 29 ministries and divisions recorded lower-than-average implementation rates, including the health services division, railways ministry, commerce ministry, women and children's affairs ministry, civil aviation and tourism ministry, industries ministry, health education and family welfare division, primary and mass education ministry, and the chief adviser's office.
Among the largest allocation holders, the Ministry of Science and Technology spent the most, Tk1,266 crore in two months, equivalent to 10.75% of its annual allocation. The Local Government Division followed, spending Tk1,237 crore, or 3.45% of its allocation.
Other major ministries and divisions recorded far lower implementation rates: Roads and Highways Division 1.48%, shipping ministry 2.1%, Secondary and Higher Education Division 3.89%, Power Division 2.58%, water resources ministry 3.99%, agriculture ministry 2.66%, and Bridges Division 1.16%.
